'Consultants are not acting fairly and that is one of our biggest problems'

More than delayed payments, the greater issue facing the construction industry in Dubai, is the problem of consultants specifying products that are unavailable in the market, said the head of a leading Turkish construction and contracting firm yesterday.

"We see that consultants are not acting fairly and this is one of our biggest problems. Delay in payments can be accepted in the current economic scenario. But the bigger problem is that consultants are specifying products that have gone out of business or don't exist anywhere in the world," said Mehmet Nazif Gunal, Chairman at MNG Group.

"This puts us in the default zone even before we start and we are not given any direction on where to find the product. Six months later, we are asked to make our recommendations for the same product. We have finished all our projects on time whenever we have undertaken any project and hence are upset about this situation."

The group has been in Dubai for the past three years and is working on two projects. "We were working on the 116 villas at the Palm Point in Palm Jumeirah but have stopped since Nakheel has put the project on hold. However, work is continuing on the other project in the Jumeirah Village triangle, which involves 700 villas. 65 per cent of the construction is finished and we expect to finish work by the end of 2009," he said. "Towards the end of last year, we won a contract from the RTA that involved improvement of the Al Khail Road and is expected to finish by February 2010. The contract value for Jumeirah Village and the RTA project totals over $400 million [Dh1.4 billion]."

MNG has activities in eight sectors including construction and contracting, energy, air transportation, cargo transportation, tourism, finance, aircraft maintenance and media. It employs more than 20,000 people. MNG is at present executing a range of different construction contracts valued at over $2.8bn in the UAE, Algeria, Libya, Saudi Arabia and Bulgaria as well as contracts undertaken in Turkey. The company was established in 1960 by Gunal, who is a civil engineer by profession.

He added that another issue faced in Dubai is that construction contracts are one-sided and do not favour contractors.

"In reality, last year was not a good year for us because we were dealing with fixed contracts that were committed in 2006 before the prices rose."

He urged the Government of Dubai to address the issues in the construction sector.

"We are in discussions and are hoping to come to an understanding. We sincerely hope that the Government of Dubai will address all the issues in our sector. We wish to continue to do business in Dubai and believe that Dubai's asset is its image. But it should take care that the mistakes of few people in the industry should not affect the construction industry."

The group is looking at new projects in the region.

"We have some enquiries from Saudi Arabia but are also currently working on two water pipeline projects and 152 clinics all over the country," said Gunal.

"Meanwhile, we are hoping that the situation will improve in UAE and expect that the market will start to improve in 2010."